At ZDNet, Robin Harris makes a mildly persuasive argument that Blu-Ray is dying and will end up becoming a videophile niche format like laserdisc. When Toshiba threw in the towel and gave up on HD-DVD about 8 months ago, it looked like a major victory for Sony on multiple fronts. First, they were the uncontested heir to the HD movie market and second, fence sitters in the next-gen gaming console market had a reason to plunk down a little extra for a PS3. But 8 months later, things haven't changed a whole lot. Standalone BR players have come down in price and will be reaching affordable levels shortly. PS3 sales received a bump, overtaking the XBox sporadically during this year, but it looks like Microsoft's price cut has reestablished PS3 as the loser of the next-gen gaming market (of course, both are being clobbered by Nintendo). Sony is betting on the release of several highly anticipated games for the PS3 this holiday season, which should sell consoles and thus increase BR market penetration.

There are lots of things to consider here:
  • Blu-Ray is better than DVD, but the difference is not as great as between DVD and VHS. One of the big issues with VHS was that the format degraded the more you watched it. DVD was thus a huge step forward in quality that would not degrade. On a personal level, as a huge movie nerd with a relatively large HDTV, I'd love a better solution for watching movies so maybe it would still be worth it for me.
  • The format war between Blu-Ray and HD-DVD really took all the steam out of the enthusiasm for HD discs. I sat on the fence during the war, and I have to admit that I really dislike Sony as a company (more on this a little later).
  • Blu-Ray was counting on the fact that standard DVDs didn't look that great on HD televisions... but they missed the advent of relatively cheap upconverting DVD players. Perhaps if the format war ended sooner, this wouldn't have been that big of a deal, but it's too late for that. I have a large DVD collection and don't need to replace most of them with BR discs because they look good on my cheapo upconverting DVD player.
  • Harris notes an interesting part of the industry: While consumers are indifferent to the format, only really large producers can afford to release discs in the format. Harris has the details in his article, but it doesn't seem likely that we'll see a lot of small indie or foreign flicks on Blu-Ray unless the price of producing discs comes down significantly. As a movie nerd, this hurts. Hopefully, things would improve if market share increased.
  • While standalone BR players are coming down in price, Sony has repeatedly stated that the PS3 is not (at least, not for the upcoming holiday season, which is when you'd expect it). Sony is counting on their upcoming slate of games to drive sales. This is interesting since the two other next-gen gaming consoles both cost around half of what the PS3 costs. Gaming consoles have the time-honored tradition of selling their console at a loss so that they can pick up market share and make a boatload on games. The PS3 seems to be attempting to buck that trend. This may be because they were too ambitious with their system... I bet they're already losing lots even at the $400 price point. For a variety of reasons, the PS3 is the only BR player I'm really considering. I like video games and from what I've seen, the PS3 is probably the best BR player out there anyway.
  • The current economic woes do not bode well for BR. If we weren't looking at a 2 year recession (at least), then maybe Sony's bullish attitude would be warranted. As it stands, I'm at little confused by their strategy here. They're attempting to wring every last dollar out of every angle. High console prices, high authoring costs and high disc prices make it difficult to really get behind this format.
  • On the plus side, if BR doesn't work out and HD downloads become the way of the future, the PS3 has that built in as well... Of course, they'll have to work out some of the bugs in that system, like the dumb DRM scheme that does not allow you to redownload movies you purchased. DRM plays a big role in why I absolutely hate Sony, so it's distressing to see that they still don't get it. But then, most downloadable movie services have similar issues. That is the one big hurdle downloads will have to clear before going mainstream... and given the way things have gone so far, that's probably going to be a challenge.
  • As a Netflix customer, it's mildy annoying that I'd have to pay a surcharge to be able to rent BR discs. It's an understandable position on Netflix's part - the format is more expensive and the amount of BR customers is low - but it's still annoying.
  • One advantage of the PS3 over the XBox is that their online component is free, while you have to pay for XBox Live. On the other hand, XBox Live is by all accounts much better than PS3's online offering, and the PS3 network's terms of service seem to indicate that they really just don't get it.
  • It's only been 8 months since the death of HD-DVD. Perhaps everyone is being a bit too harsh jumping on BR. Sales have been steady, just not stellar. And it turns out that HD-DVD wasn't the only challenge that BR faced. You've got upconverting DVDs, HD Downloads, and now a bad economy to overcome. It's no wonder BR hasn't dominated.
All of that said, I'm still considering a PS3 system. Perhaps that means that the format isn't dying after all... or perhaps it just means that I'm a niche videophile customer. While Sony doesn't seem to be considering price cuts, I'm hoping for some sort of holiday deals. Last year, Moriarty picked up a PS3 and got 15 free movies along with it... Now that the format war is over, I doubt we'll see anything that extreme this year, but something along those lines would definitely get me interested.